Budget deficit exceeds 100 billion meticais

“The Covid-19 pandemic is not foreseen in the State Budget,” the Minister of Health revealed to the deputies of the Commission of the Assembly of the Republic on Social Affairs, Gender, Technologies and Social Communication. Minister Armindo Tiago explained to @Verdade that, since January, the fight against the new coronavirus has been carried out by withdrawing funds “from other health programmes”.

lack of funds was confirmed by the Minister of Economy and Finance, who, while revising economic growth downwards, clarified that, in the 109.8 billion meticais deficit foreseen in the draft 2020 Budget Law, ventilators, district hospitals and the support requested by the private sector amounted to 30 billion meticais.

The extremely late 2020 State Budget is for 345.4 billion meticais: 124 billion for civil servants’ salaries, 70.9 billion for public investments, 40 billion for financial operations and 34.5 billion for the acquisition of goods and services. The drama is that the government plans to collect only 235.6 billion meticais in revenue, 195.5 billion of that in tax. As @Verdade revealed, 14.2 billion meticais of the capital gains tax paid to the state from the business between Anadarko and Total will be added to the revenue pool, and the Executive plans to raise 28.5 billion on the stock exchange through further internal indebtedness. “When this pandemic started, we did a review and we arrived at a lower scenario, which is what we are using here (in the state budget proposal) of 2.2 percent growth (this year),” the Minister of Economy and Finance started by explaining to the deputies of the Parliament’s Plan and Budget Commission last Friday (10).

 

Adriano Maleiane confirmed the news advanced by @Verdade, clarifying to the deputies of the 3rd Parliamentary Commission that, in the US$700 million that the government is seeking from the Cooperation Partners, “we include 79 districts on the base of ‘One District, One Hospital’, which is provided for in the PQG [Five-Year Plan] but, because there are many districts that are not prepared in the event that the country enters Stage 4 (of the Covid-19 pandemic response), it was unanimously agreed that, if there is any availability, the construction of these hospitals should be brought forward”.

“We are talking about 79 districts, and the ratio of 7 million means US$553 million. If you take the US$700 million and subtract US$553 million, what remains is the amount necessary for treatment and prevention, and also about US$100 million, which has to do with the fall in revenue resulting from the decline in GDP. Our hope is that there may be some organisation or a country that come to build hospitals, and we are grateful that they are interested in offering in kind,” the head of economy and finance explained.

The minister of finance also revealed the request of the Confederation of Economic Associations for the postponement of the payment of Corporate Income Tax (IRPC). “That alone gives 29 billion (meticais), then it proposes exemption from VAT on oils, soap and Covid-19 means of prevention and treatment and this, added up, gives about 30 billion (meticais),” Maleiane said. These amounts are not included in the State Budget proposal expected to be approved this week by Frelimo party deputies.

Combating the new coronavirus is being done by withdrawing funds “from other health programmes”

In another parliamentary hearing on Saturday (11), this time to the Commission on Social Affairs, Gender, Technologies and Social Communication, the Health Minister reiterated that: “The Covid-19 pandemic is not foreseen in the State Budget”. Armindo Tiago told deputies that the Health Ministry projected the cost to Mozambique of facing the new coronavirus “is US$50 million, which we hope will be covered by 70% by Partners and 30 percent by the State Budget”.

“Of this amount, 8.2 million is for equipment, 3.2 million for laboratory issues, 19 million for equipping isolation centres and 2.8 million for the acquisition of medicines. The evolution of Covid-19 as a pandemic is unpredictable, which is why this Budget we are giving you is a document that is progressively being updated. The remainder of the value would be used essentially in the other components, between prevention and communication in Health,” he detailed.

Asked by @Verdade how the expenses the Ministry of Health had incurred since January have been paid for, Minister Armindo Tiago stated: “We are doing it through the twelfths reallocation process, but we also reallocated the funds allocated by the Partners. We had a meeting and they accepted us reallocating the funds available (for other health programmes). These are the ones that are being used to face Covid-19, obviously with all the difficulties that this process entails. We are withdrawing from other health programmes considering that this is a priority. When the State Budget is approved, we will make the due repayments.”

Presidential jets could be made available to the Ministry of Health

@Verdade learned that the National Institute of Health, an institution that has been at the forefront in testing suspected cases and epidemiological investigations of patients, is running at a budget deficit. In 2019, out of the 92 million meticais it expected to receive from the State Budget, only 63.5 million were made available. More than 41 percent of the funds that the INS needed for research and scientific activities had to be obtained through bilateral agreements, multilateral organisations and competitive funds.

In fact, the collection of samples of the suspected cases and their transport from the provinces has been carried out through the normal flights of the Mozambican Airlines LAM, by a private cargo company that charges for its services and “in a ride” [provided] by oil company Total. It is important to remember that our country has two executive jets at the service of the President of the Republic which have, since Covid-19 was detected, been on land.